March 26 (Bloomberg) -- Hong Kong billionaire Jimmy Lai’s
sale of his Taiwan newspaper and magazine collapsed amid
protests that the NT$16 billion ($536 million) deal would
silence a critical voice on China and give the buyers too much
control of the island’s media.

A deadline to execute the Next Media Ltd. sale to
investors led by Tsai Shao-Chung, whose family owns Taiwan’s
China Times Group, won’t be extended, Next spokesman Mark
Simon said in a telephone interview today. Next still plans
to sell its television assets in Taiwan, he said.

The deal’s failure prevents the transfer of Lai’s Apple
Daily, Sharp Daily and Next Magazine, with a combined
circulation of about 1 million, to interests seen as more
favorable to China. Protesters rallying against Taiwan President
Ma Ying-jeou, who has championed closer economic ties with the
mainland, urged regulators to block the sale at a rally in
January.

Taiwan has been ruled separately from China since 1949 when
the Kuomintang party fled to the island during a civil war with
Communist forces. Relations between Taiwan and China reached
their warmest in more than six decades as Ma focused on economic
ties and dropped the pro-independence rhetoric of his
predecessor.

“We’re against the concentration of media in the hands of
pro-China interests,” Jason Lin, a spokesman for the opposition
Democratic Progressive Party, said by phone today, declining to
comment on the Next Media deal.

Next Media’s shares have fallen 16 percent this year,
compared with the 1.8 percent drop for Hong Kong’s benchmark
Hang Seng Index. The stock is suspended today pending a
statement.

Regulatory Concerns

“Next Media is going back to the print business in
Taiwan,” Simon said. Lai signed an agreement in November to
sell his print assets in Taiwan to local businessmen including
Tsai of the China Times Group, which controls the Commercial
Times newspaper, Taiwan’s CtiTV and at least five other media
outlets according to its website.

Owning the Apple Daily would give the Tsai family more than
45 percent of the island’s newspaper market, according to
National Chung Cheng University’s Kuang Chung-Hsiang, raising
regulatory concerns.

“If one of these conglomerates gets control of too many
media, it gives the family that controls it a real effective
microphone in influencing public opinion,” said Doug Young,
author of the book “The Party Line: How the Media Dictates
Public Opinion in Modern China. ‘‘They probably don’t want too
much of that concentrated in one family.’’

Anti-Beijing Stance

The Taipei-based Economic Daily News earlier today reported
that the sale might fall through because Tsai Eng-meng, the
father of the Next Media bidders’ leader, sought to pare the
purchase back to avoid antitrust queries into his family’s media
ownership. Tsai Eng-Meng is Taiwan’s richest man and chairs Hong
Kong-listed food and drink maker Want Want China Holdings Ltd.
as well as controlling China Times Group.

The elder Tsai’s $2.4 billion purchase of cable operator
China Network Systems Co. is still subject to approval from
Taiwan’s broadcast regulator. Last month the regulator said the
purchaser hadn’t fulfilled its conditions.

Next Media’s Apple Daily and Next Magazine are banned in
mainland China because of their anti-Beijing stance. Lai started
the Taiwan version of Next magazine in 2001, followed by Apple
Daily, known for celebrity gossip and graphic depictions of
violent crimes.

Simon said Next Media still plans to sell its loss-making
television assets in Taiwan, which include Next TV, for NT$1.5
billion.